10 Steps to Writing an Effective Employee Handbook

Not complying with current law can be expensive in today’s legal climate and businesses should review their employee handbooks and employment-related policies to make sure they are up to date. More importantly, employers should draft their handbooks so employees actually read and follow the policies. First and foremost, employers should consider their employee handbooks as a management communication tool—not as merely a document for strict legal 
compliance. As such, the handbook should positively reflect the values of upper management and create an employee friendly environment.

Set Internally Directed Standards

In the world of handbook drafting, some handbooks are integrity-based and others are compliance-based. Integrity-based handbooks are proactive, morally oriented, management-directed, positive and encouraging. The policies in an integrity-based handbook reflect internal values, not external obligations. On the other hand, compliance-based handbooks are defensive, legalistic, lawyer-driven, punitive and based on externally imposed rules. Where possible, employers should adopt the integrity-based model for their handbooks and hold employees to higher standards than those minimally required by applicable laws. Companies that set this positive tone in today’s world are more likely to attract the next generation of workers and to succeed in the future.

Tailor to the Employer’s Situation

Although many of the policies in a handbook will be common across industries, every employer should endeavor to tailor its handbook to its unique situation. That means taking into account the size of the employer, its geographic location or scope of operations, its operating culture, employee expectations and other relevant factors. The handbook should be tailored to set the proper tone and to comply with the many laws that may apply.

Write in General, Easily Understood Terms

A handbook is a summary of benefits and the employer’s most important policies. It is not intended to be a comprehensive personnel procedure manual, nor does it need to address every possible contingency that can be expected. By way of example, the military leave policy does not need to go into every detail about what the employer will do for service members while they are out on leave or when they return. The handbook can simply state that employees should provide advance notice of military leave and that the employer will comply with all applicable laws pertaining to service members. Similarly, sub-sections describing insurance or retirement benefits do not need to include deductible amounts or other coverage details that are likely to change from time to time. Instead, insurance-related sections should simply state that the employer provides such benefits, that benefit levels and costs are subject to change from time to time and that the employer pays the majority of the cost for such benefits. Employees with specific questions should be referred to either the human resources department or to the current summary plan description document. By using such general language, the handbook will be more readable and more dynamic in that it will not have to be revised and republished every time specific benefits change. Generalities may also serve to allow management more discretion with specific situations that may arise.

Start With Personalized Messages

The handbook should begin with a letter from the employer’s founder or president welcoming the employee to the organization. Following that greeting, the handbook should contain a positive description of the company’s history. This section should inform the new employee about significant facts in the company’s history or about its plans for the future. In the home health care 
industry, for example, employers may want to highlight any significant mergers or acquisitions recently undergone by the company. The idea here is to portray the business in the most positive light 
possible and to make new employees feel a sense of pride and loyalty for their new employer’s standing in the industry.

Cover Employer Provisions

When employees read a handbook, they naturally want to know what the employer is going to give them for working for the company. To meet this expectation—and to make a positive first impression on the handbook reader—the first major section of the handbook should list all of the benefits and other items of value that the employer provides employees in addition to their paycheck. Obviously, this part of the handbook should list all of the insurance and retirement benefits, preferably with a one paragraph or so description of each. Listing each such benefit in a separate paragraph allows the table of contents to include a heading for each benefit and makes the list of benefits more impactful on employees. This first major section of the handbook should also include sub-sections on the employee’s pay, paid holidays, vacations and other paid time off from work, such as sick or medical leave, bereavement leave, civic duty leave, etc. Leave that is not paid should also be listed here, including extended medical or family leave, military leave or personal leave. Other benefits, such as tuition reimbursement, relocation benefits or employee discounts should also be listed here. Even government required benefits should be included here as sub-sections, including social security, worker’s compensation, COBRA, modified duty or reasonable accommodation policies and other benefits which the employer provides—all of these topics should be addressed in this major section of the handbook.

Emphasize Safety and Security

A handbook should stress the employer’s concern for safety in the workplace in the most employee-oriented way possible. No employer wants its employees to be injured at work, and this message should come through loud and clear in the handbook. Employees who get this message will be positively influenced by the handbook. The employer’s safety programs, references to its safety committee and training, and to policies covering drugs and alcohol, workplace security policy, weapons, driving and criminal records, workplace chemicals and related matters will all reinforce the employer’s overarching concern for safety on the job.

Communicate Performance and Conduct Expectations

Although employees do not necessarily like to read all of the ways they can be terminated, it is much worse not to inform employees of the employer’s expectations before issues arise that may adversely affect them. In this regard, employers should use the handbook to outline major work rules, such as rules of conduct and policies relating to harassment, discrimination, drugs, alcohol, electronic communications, workplace violence, conflicts of interest, confidential information, driving or criminal records and other policies that should be communicated to every employee.

Organize Headings

To make a handbook more readable, employers should use numerous headings and sub-headings as guides. Headings break up long stretches of text and help employees understand the handbook’s content. They also make it easier to find topics and for employees to actually use the handbook. A table of contents is essential and can also be used as an outline for the orientation process.

Update Periodically

Circumstances and laws are constantly changing. Although the handbook may be drafted to adapt to changes over time, employers will inevitably need to review and update their handbooks regularly to keep them current. When making updates, employers should reflect on past situations and incorporate changes into the handbook to address such situations in the future. Before publishing and distributing a new employee handbook, employers should have their employment lawyer review any changes, just to make sure that the handbook remains in compliance with all the applicable laws at the time. Having outlined a few ways to make an employee handbook more likely to be read by employees, here are ten important policies that every employer should have in their employee handbook. These important policies should be reviewed periodically for legal compliance.

10 Policies Every Handbook Should Feature

1. No discrimination, harassment and retaliation With harassment verdicts against employers routinely running into millions of dollars, employers need written policies prohibiting all types of workplace discrimination, harassment and retaliation. Such policies should, at a minimum, cover all applicable protected classifications, such as race, color, national origin, sex (including pregnancy and same sex), religion, age, disability and other categories, including categories that may be protected by state or local laws or regulations; contain specific examples of prohibited conduct; explain the consequences of policy violations; contain a specific reporting procedure; contain a bypass reporting procedure and prohibit retaliation against those who report violations. 2. Problem-solving or grievance procedures An effective problem-solving procedure can help an employer avoid liability for discrimination, harassment, retaliation, safety complaints and union activity, as well as improve employee morale. Such policies should include a step-by-step procedure for addressing employee concerns and complaints. Employees should follow the chain of command, but they also should have access to a bypass procedure for reporting concerns if for some reason they cannot follow the standard procedures. In recent years, the best advice has been to establish a special direct procedure for claims of discrimination, harassment and retaliation—outside of the normal chain of command. 3. At-will statements Employee handbooks and written policies should contain the necessary legal disclaimers in prominent places. For example, a handbook should state that it is not a contract and that employment is at-will under state law and can be terminated at any time, for any reason, with or without cause and without advance notice. Similar language should be included on the employment application and on a separate acknowledgement of receipt of handbook form signed by each employee and retained in the employee’s personnel file. 4. Rules of conduct Employers should avoid both oral and written promises of progressive discipline and lists of specific work rules with levels of discipline. Instead, rules of conduct should state that employees can be discharged immediately for a variety of things. That statement should be followed by a list of broadly defined acts of misconduct, such as absenteeism or tardiness; breach of confidence or security; conflict of interest; damage to property; fighting, threats or weapons; fraud, dishonesty or false statements; harassment; insubordination; misuse of property; sleeping or inattention; solicitation or distribution; substance abuse; theft; unlawful activity; unsafe work practices or other applicable misconduct. Poor performance, although technically not misconduct, also should be included as a basis for termination. 5. Drugs and alcohol Drug and alcohol policies should require, as a condition of employment, that applicants or employees not have drugs or prohibited amounts of alcohol in their systems. Employers should avoid policies that refer to being under the influence or impaired because those terms create a higher legal burden for employers. Such policies should state the consequences for testing positive or otherwise violating the policy and that the employer reserves the right to test at any time and also to conduct searches. 6. Workplace security and no weapons In view of the increase in workplace violence, every employer needs strict policies that address workplace security and weapons. A workplace security policy should state that any employee who commits or threatens any violent act against any person while on company premises or at work will be subject to immediate discharge. The policy also should cover off-site conduct and procedures for reporting and investigating violent acts or threats. This policy should also reaffirm the employer’s right to conduct background checks at any time during employment. Of course, compliance with the Fair Credit Reporting Act is still required even with such language in the handbook. 7. Safety Safety continues to be a workplace priority and a handbook should contain essential safety rules and procedures. In addition to listing specific safety rules and procedures, the handbook should include at least general references to the employer’s safety program, its safety committee, record-keeping requirements, training procedures and their overall safety program. Safety policies should reflect compliance with current standards and regulations and a safety coordinator should be specifically identified in the handbook. 8. Electronic communications With the extensive use of email and other electronic communications systems, employers should state their policies about the use of such tools. Among other things, employers should specify their right to access such systems for business-related reasons; prohibit (or limit) personal use of such systems; 
prohibit insulting or offensive communications such as sexually explicit or offensive messages, jokes or cartoons, propositions or love letters, ethnic or racial slurs or any other harassing or disparaging messages and require employees to follow the employer’s encryption procedures. Should a lawsuit arise, electronically stored and even deleted information likely will be accessible to the opposing party. In view of the recent changes to the Federal Rules of Civil Procedure, employers should also include references to their document retention and litigation hold policies. 9. Confidential information and conflicts of interest At a minimum, all employers should have policies in their handbooks that protect their intellectual property, business relationships, information and similar assets. These policies should prohibit conflicts of interest and unauthorized use and disclosure of confidential information and trade secrets. A confidential information policy should state, among other things, that unauthorized use or disclosure of such information may result in discipline, up to and including immediate discharge or civil or criminal actions by the employer, as appropriate. 10. Family and medical leave The Family and Medical Leave Act requires employers with 50 or more employees within a 75-mile radius to provide eligible employees with a leave of absence for family or medical reasons, benefits continuation and reinstatement to the same job if the employee returns to work prior to the expiration of the leave. It also requires covered employers to include a family and medical leave policy in their handbooks, post a prescribed notice and follow certain notification procedures.